The Dip Is Here for Archer Aviation. Here's Whether to Buy It or Walk Away.

2025 was the year of air taxi hype. In 2026, the shine is coming off this disruptive new industry and prior investor favorite. Stocks like Archer Aviation (NYSE: ACHR) are down 62% from all-time highs, falling quickly amid broad market sentiment and investor demand to exit risk assets.

The company reported earnings in early March and is making steady progress to bring its electric air taxi vision to market. Does that mean you should buy the stock now? Or is now the time to just walk away?

Bringing air taxis to market

Electric air taxis utilize battery technology to transport passengers like a helicopter -- but more quietly -- across urban areas. The concept can turn a 60-minute drive in traffic into a 10-minute air taxi ride, which would be a strong value proposition in virtually any city around the world.

Archer Aviation has been working tirelessly to develop its Midnight aircraft and get it approved by the Federal Aviation Administration (FAA). It recently achieved 100% compliance with the FAA for its aircraft, a huge milestone for the vehicle. Now, it will begin working with local regulators in New York, Florida, and Texas to start getting taxi networks operational in these cities sometime this year.

It is an exciting time for the business, but these are still early days for the start-up. If it can scale up taxi networks in dozens of cities around the globe, there is an opportunity for the company to generate hundreds of millions, if not billions, in annual revenue at some point in the future. However, today, it is still a pre-revenue start-up that is not doing much financially except burning cash and diluting shareholders.

Image source: Getty Images.

Should you buy or walk away?

You can envision a future where Archer Aviation is a successful business. Air taxis are the future of urban travel, and they can print money by either selling vehicles to third parties or operating their own taxi network, making revenue on every ride. It also has a burgeoning defense business focused on deploying its technology to the battlefield and is working on autonomous driving for air taxis.

The problem is, this is all theoretical, and Archer Aviation looks like a mess financially right now. It had an operating loss of $729 million with zero revenue in 2025. To keep the business alive, shares outstanding have grown by 200% cumulatively over the last five years alone.

With a market cap of $3.88 billion today, Archer Aviation may be cheaper than it was in 2025. That does not mean the pre-revenue stock is a buy, though, given the uncertain future of the electric air taxi market. Walk away from this stock; now is not the time to buy the dip on this risky venture.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.